Amazon's Golden Globes give it new credibility in Hollywood

Deepa Seetharaman, Piya Sinha-Roy

4 Min Read

SAN FRANCISCO/LOS ANGELES (Reuters) - Amazon.com Inc’s success at Sunday’s Golden Globe Awards may help it win over two key audiences: Hollywood’s A-list talent and the shopping customers the retailer wants to join its Prime membership program.

“Transparent”, about a divorced parent who comes out as transgender to his three grown children, won a Golden Globe for best TV comedy while lead Jeffrey Tambor won for best actor. They are the first major wins for Amazon.

“It gives Amazon a way to go to the TV industry and say ‘you do a show with us, you can win awards too,’ whereas it couldn’t say that a week ago,” said Eric Deggans, TV Critic at NPR.

More importantly for Amazon, awards are a new calling card for Prime, its $99-a-year club known for two-day shipping, which the company sees key to growth.

On Thursday, Amazon will unveil 13 new pilots for programs that, like Transparent, will only be available for free on Prime.

In some cases, Amazon has pitched Prime primarily as a video service, a shift in marketing from the focus on shipping.

In a September survey conducted by RBC Capital Markets, 10 percent of Prime members said unlimited instant streaming video was its most important feature, up from 7.9 percent in May 2013.

Prime members spend three times more on Amazon.com than other consumers, according to International Strategy and Investment Group analyst Greg Melich.

Michael Scanlon, who manages $3.5 billion at Manulife Asset Management and holds shares of Amazon, said drawing new Prime members was worth some video investment. “Over time they should be able to get that paid back in pretty powerful way,” he said.

FINDING THE RIGHT MIX

The Amazon Studios division launched in 2010 and initially focused on shows from little-known writers that would then be streamed to Prime members for feedback. Amazon still streams the pilots to the public, but it has focused on hiring established talent, and Studios’ chief Roy Price said the wins would reinforce the new focus on “visionary artists”.

The company also has ramped up its promotion of the new shows, addressing a lack of awareness on how exactly to watch its original content.

That compares with an earlier approach. “They said that they didn’t believe in the normal patterns of advertising that would happen when on TV because they had a different experience as a retailer,” said Michael Lehmann, executive producer on an early Amazon show “Betas”, which was later canceled.

During the last three months of the year, less than 40 percent of U.S. Prime members, or 14 million, watched at least one episode of “Transparent,” according to data from a Consumer Intelligence Research Partners survey.

By contrast, 30 million Netflix members watched at least one episode of “Orange is the New Black” and 28 million subscribers of Time Warner’s HBO Go reported watching at least one episode of “Game of Thrones,” said CIRP, which estimates that there are between 35 million and 40 million U.S. Prime subscriptions.